Not too long ago I had the pleasure of talking the collector car market with McKeel Hagerty, the CEO of the company that bears his name. As the leading classic car insurer, Hagerty has what is likely the world’s largest database of collector car values, data that’s based upon inside information such as what policyholders paid for their cars, what they value them for, dealer and private transactions, auction results, and more.
McKeel is extremely astute, personable, low key, and has a wickedly dry sense of humor. And he loves cars. How his firm crunches numbers to uncover trends, especially when they do their deep dive advisory role for clients such as Barrett-Jackson, is mind bending. Somuch so that to paraphrase the old EF Hutton television ad (and to date myself a bit a bit in the process), “When Hagerty speaks, I listen.” (Youtube the ad if you haven’t seen it…)
With Arizona’s auction week now upon us, some highlights from our conversation seemed appropriate. And I highly recommend using https://www.hagerty.com/valuationtools when you are researching a car, or trying to determine its worth.
Question: What is the best advice a novice collector or newcomer could get?
Research, research, research—on the cars themselves, and their values. Probably the part of research newcomers don’t spend enough time on is they tend to overbuy a car, but underestimate the cost of maintenance. This is especially true on later model supercars from the 1980s and ’90s, where reliability wasn’t that high.
These younger guys think they are getting a lot of car for the money, but don’t factor in reliability. For instance, a 25th Anniversary Lambo Countach that hasn’t had its maintenance done.
So I would say buy with the best chances of having a good experience the first time around, then buy the car you have always dreamt of.
Q: What is your overall assessment of the market? What are you seeing?
It’s cooler than its peak in 2014. Part of this is from the Baby Boomers shrinking the size of collections and increasing quality; it’s no longer about filling a warehouse with 55-57 Chevys and being the guy with the most of those, it’s now about experience and what can you do with it. That type of hoarder mentality that existed in previous generations no longer does.
Q: There must be some segments that are hot, and appreciating…
Yes, there are. In general entry-level stuff is doing pretty well, cars that are under $100,000. Certain musclecars…have not only improved in value from the recession but have gone beyond those prices. For instance, people are buying Mustangs and Camaros so they are doing really well. This would be 1965-66 Mustangs, 1967-69 Camaros and 1970-73 Dodge Challengers. This is good, solid findable stuff.
Trucks in particular are great entry-level buys, for they can be substantially under the $100,000 point just mentioned. Examples are early Ford F1s (1948-52), and early Chevrolet trucks. But the real standouts are early Ford Broncos from 1966-67; they are up almost 30% over the last two years. For the guy who is around 40, this is the hot ticket, along with Toyota Land Cruisers.
In the middle ground…1991-2005 Acura NSXs are up 40% over the past two years. Higher up in value, Lamborghini Diablos are up over 20%, but this is when they don’t catch fire. I’m saying that only half facetiously, for a Diablo is an example of what we were talking about earlier, where you need to factor in reliability. BMW Z8s have also done well over the past few years.
Almost mirroring this, are cars that are showing interest on our valuation page (https://www.hagerty.com/valuationtools), where people hit the valuation tools, or are getting insurance quotes. In particular we are seeing this in 1994-2004 Mustangs, and 1993 and later Firebirds. The truly great cars got priced out of the market, and people are saying, “I want to be in a car but can’t afford it,” so they are going with what is within reach. Most are sports cars—think of the 1997-2004 era of Corvettes, and you get a lot of car for the money.
Q: What segments are depreciating? Can you give specific examples?
Yes. Established classics like Jaguar XK120s are down a little, and the Tri-Chevys (1955-57) are steady to slightly down. Mercedes 230-280 SLs are also down slightly, while a 190SL is down nearly 20%. Lamborghini Countaches were down 16% last 12 months but had a 155% increase in 2014, and a 30+% increase in 2015.
Q: If you were going to fill up a warehouse with a single car for a five-year hold, what would it be, and why?
It would be two cars—Toyota Supras from 1993-97, especially the Mk IVs; and Lamborghini Diablos at the right price.
On a different level, my wild card is first generation unmodified Mazda Miatas. If you are a person who wants to buy a $5,000-$7,000 convertible and doesn’t want to have a reliability problem like the old days with Triumphs and such, Miata are an outstanding value. And so is the first generation Audi TT.